Patient Rights

The substantive issue in this case is whether Anthem Health Plans, Inc. and its affiliate, WellPoint, Inc. (collectively, “Anthem”) deprived beneficiaries of employee health plans of legally required benefits for mental health and substance abuse claims. The immediate issues on appeal are procedural: whether, in a dispute of this nature, physicians have legal standing to represent the interests of their patients and whether medical associations also have standing to represent the interests of their members and their members’ patients.

AMA interest

The AMA believes that physicians are to serve as their patients’ advocates. Furthermore, the AMA supports parity of insurance coverage for mental illness and substance abuse.

Case summary

The plaintiffs in this case are the American Psychiatric Association, two Connecticut psychiatric societies, and two psychiatrists. They sought to compel Anthem to provide parity of health care and substance abuse benefits with the benefits applicable to physical injuries and illnesses. According to the complaint, Anthem breached a fiduciary duty remediable under the Employee Retirement Security Act (ERISA). In addition to ERISA, they invoked the beneficiaries’ plan documents, the Mental Health Parity and Addiction Equity Act, and Connecticut common law.

The trial court dismissed the case without reaching the merits. It held that the case was procedurally insufficient, primarily because

• ERISA fiduciary duty claims can only be brought by a plan beneficiary and not by a third party, even if (as here) the beneficiary assigned her rights to the third party; • Because the claims of the medical associations derived from the claims of their members and the members’ claims were deficient, the associations could not have standing; and• The state law claims would have to be filed in state court.

The plaintiffs have now appealed to the United States Court of Appeals for the Second Circuit.

Litigation Center involvement

The Litigation Center, through the AMA and the Connecticut State Medical Society, filed an amicus brief on behalf of the plaintiffs. The brief argued that the trial court misconstrued the requirements for standing under ERISA and it would be inequitable to deny the plaintiffs a right to sue on behalf of mental health and substance abuse patients.

IssueThe issue in this case was whether mandatory drug testing of pregnant women seeking obstetrical care at a state funded hospital was permissible on constitutional and statutory grounds.

AMA interestThe AMA supports protection of patient privacy.

Case summaryThis case challenged a policy fashioned largely by Charleston, South Carolina law enforcement officials whereby pregnant women who sought obstetrical care at the Medical University of South Carolina ("MUSC) were subjected to warrantless and non-consensual drug testing designed and used to facilitate arrest and prosecution of mothers who tested positive for cocaine. MUSC was a state-funded hospital and the only medical facility in the Charleston area to treat indigent and Medicaid patients, a majority of whom were African-American. When the policy was implemented no drug treatment was unavailable for pregnant women. Mothers and expectant mothers who tested positive at the hospital were simply jailed. The drug testing policy was not used in any of the other Charleston area hospitals.

Ten women, including nine women who had been arrested for testing positive for illegal substances, challenged the policy on various constitutional and statutory grounds. In upholding the policy, a divided panel of the Fourth Circuit Court of Appeals held that, because urine drug screens may serve a medical purpose, there was no need for a warrant or consent, even though the testing had been done to further law enforcement objectives.

The Supreme Court reversed and remanded, holding that the Fourth Amendment to the U.S. Constitution’s general prohibition against nonconsensual, warrantless and suspicionless searches necessarily applied to the policy.

Litigation Center involvementThe AMA filed an amicus brief in the U.S. Supreme Court, arguing that the policy mandating drug testing of pregnant women violated the patients’ expectations of privacy when they consulted with their physicians, discouraged drug-abusing women from seeking prenatal care, and was generally ineffective in preventing drug abuse.

IssueThe issue in this case was whether a physician is liable for breach of fiduciary duty to patients for not disclosing any financial incentives to limit care.

AMA interestThe AMA believes that the primary burden of disclosure of financial incentives relating to a patient's treatment lies with the HMO, not with physicians.

Case summaryThe Illinois Appellate Court, relying in part on the AMA's Council on Ethical and Judicial Affairs (CEJA) Opinion 8.132, held that a physician and a managed care organization have a fiduciary duty to disclose to their patients any financial incentives to limit medical care.

The Illinois Supreme Court reversed, holding that no cause of action exists for breach of fiduciary duty against a physician. The Court ruled that the alleged breach of a fiduciary duty for failure to disclose an interest in a Medical Incentive Fund was merely a "re-presentment" of plaintiff's medical malpractice claim. Concerning CEJA Opinion 8.132, the Court stated that Illinois law places the burden of disclosure of "financial inducements" on HMOs, not on physicians.

Litigation Center involvementThe Illinois State Medical Society and the Litigation Center filed an amicus brief which supported the CEJA opinion, while emphasizing the practical burdens a physician faces in making the disclosures mandated in the appellate court decision. The brief also argued that, under the circumstances of this case, the court should not equate the physician's legal and ethical obligations, as the primary duty to disclose financial incentives should rest with the health plan.

New York State Psychiatric Association v. UnitedHealth Group (2nd Cir.)

The substantive issue in this case is whether beneficiaries of employee benefit health plans received proper payment for mental health and substance abuse benefits from the third part administrator (“TPA”) of several employee benefit health plans. However, the immediate issue of concern to the AMA and the Litigation Center is whether the New York State Psychiatric Association (“NYSPA”) has legal standing as a medical association to represent the interests of its members and its members’ patients in this dispute.

AMA interest

The AMA believes that physicians are to serve as their patients’ advocates. Also, the AMA supports parity of insurance coverages for mental illness and substance abuse.

Case summary

The plaintiffs in this case were beneficiaries of employer-sponsored health insurance plans, two providers of mental health services (one of whom is a psychiatrist), and NYSPA. The defendants were United HealthGroup (“UHG”) and three UHG subsidiaries, all of whom were TPAs of the beneficiaries’ plans. The plaintiffs sought to bring the case as a class action.

The complaint alleged that the defendants had failed to pay proper mental health and substance abuse benefits under the beneficiaries’ plan documents and under various laws, such as the Mental Health Parity and Addiction Equity Act, the New York Parity Act, and the New York prompt pay statute. The suit sought monetary damages and an injunction.

The trial court dismissed the case without reaching the merits. It held that the case was procedurally insufficient, primarily because (according to the court)

The beneficiaries’ rights were governed by ERISA, but UHG and its subsidiaries, being TPAs, could not properly be sued under ERISA; and

NYSPA lacked standing to sue, partly because the case would require participation of individual NYSPA members (not merely an association representing those members) and partly because the members of NYSPA themselves lacked standing to enforce their patients’ rights to receive benefits.

The plaintiffs appealed to the United States Court of Appeals for the Second Circuit.

Litigation Center involvement

The Litigation Center filed an amicus brief to support the associational standing of NYSPA.

IssueThe issue in this case was whether a medical society of psychiatrists could prosecute claims against a managed care organization for systematic mishandling of the claims for mental health benefits of the psychiatrists’ patients.

AMA interestThe AMA supports the full and appropriate provision of health care services, including mental/behavioral health care services, and the AMA supports third party payors' approval of payment for those services.

Case summary

This case, filed against Green Spring Health Services, Magellan Health Services, and four insurance companies, alleged that the defendants systematically refused to authorize and otherwise restricted the provision of medically necessary behavioral health care, in violation of the Pennsylvania Quality Health Care Accountability and Protection Act, the physicians’ provider contracts, the insurance policies themselves, and various non-contractual obligations.

The trial court dismissed the case, holding that the Pennsylvania Psychiatric Society (“PPS”) lacked associational standing to file the suit and that an arbitration clause in the provider contract precluded a lawsuit in court. PPS appealed.

The United States Court of Appeals for the Third Circuit reversed the dismissal, holding that PPS was potentially entitled, based on the pleadings, to sue on behalf of its members and their patients. The court remanded the case to the trial court for consideration of the remaining issues, including the arbitration clause.

Litigation Center involvementThe Litigation Center and the Pennsylvania Medical Society filed an amicus brief to support PPS in its appeal. They also contributed financially to the PPS legal expenses.

Case summaryMoran sought reimbursement for the expense she incurred in having microneurolysis surgery. Rush, her HMO, contended that her treatment was not medically necessary and denied her claim. The Illinois HMO Act requires that, in such disputes, the matter be submitted to an independent reviewer for a binding determination. Rush refused to provide the independent reviewer, so Moran obtained a court order compelling the independent review. The trial court denied Rush's objection that ERISA preempted the Illinois HMO Act's independent review requirement.

The independent reviewer found that the microneurolysis surgery was medically necessary, but Rush still refused to pay. When Moran sought a court order requiring Rush to pay, however, the same court that had ordered the independent review now found for Rush. It held that, although ERISA did not preempt the HMO Act's requirement of independent review, it did preempt that portion of the Act which required the HMO to comply with the findings of the independent reviewer.

Moran appealed to the United States Court of Appeals for the Seventh Circuit. The Seventh Circuit reversed, holding that the independent review provision of the Illinois HMO Act fell within ERISA's "savings clause" and thus was not preempted by ERISA. The United States Supreme Court granted Rush's request to hear the case, and, by a five to four decision, held in Moran's favor. The case was remanded to the trial court to ascertain whether the HMO was liable for Moran's attorneys fees and, if so, for how much.

Litigation Center involvementThe Litigation Center and the Illinois State Medical Society (ISMS) filed an amicus curiae brief on the plaintiff's behalf in the Seventh Circuit. The Litigation Center and ISMS argued that the Illinois law addressed matters of health care regulation, which the federal government never intended to be governed by the ERISA statute.

The Litigation Center and ISMS (along with the American Psychiatric Association) also filed an amicus curiae brief on behalf of Moran and the Illinois HMO Act in the United States Supreme Court.